Electro-Spec Aerospace niche helped business' revenue skyrocket Decades later, Franklin electroplating firm working to diversify its customer base It all started with spoons.
These days, Franklin-based Electro-Spec is a $5 million a year electroplating company that produces components for the automotive, telecommunications and medicaldevice industries. That's quite a change from its origins in 1959, when the company focused on spiffing up antique silverware. "It did silver and gold plating of family heirlooms," said President Jeff Smith, who bought the company in 1997.
That didn't last long. Within a decade, the company began concentrating more on electroplating work for the aerospace industry-something that would be its bread and butter for the next several decades. In recent years, Electro-Spec has put greater emphasis on diversifying its business in the increasingly competitive electroplating market.
Electroplating is the process of using chemicals and electricity to coat something with thin layers of a metal such as gold, silver or copper. Electroplated components are widely used in telecommunications equipment, aircraft parts, medical devices and high-tech equipment. It's also a good way to restore worn or tarnished sterling silverware.
That last application is what company founder Clarence Yates had in mind when he started Electro-Spec (originally called Economy Plating) on the outskirts of Franklin. His first employee, Jim Funk, eventually became a partner and Yates'son Dave signed on as well. Before long, the company had carved out a niche in the antiques business.
That all changed in the 1960s, when the United States' space program went into high gear. NASA's technology required lots of electrical components, such as switches, that had to be electroplated to operate properly.
Electro-Spec was one of the U.S. companies that could do the job.
Smith said there was quite a bit of interest when NASA started doing business with a small firm in bucolic Franklin.
"There were newspaper stories about 'The Factory in the Cornfield,'" he said.
Nevertheless, the company proved itself capable of providing components that met the space agency's exacting standards. Other aerospace companies took notice as well, and that work made up a larger percentage of Electro-Spec's business. By 1980, the company was out of the antique restoration game.
Its aerospace customers were good to Electro-Spec through the 1980s and into the 1990s. Smith joined the company in 1994 and took control after Dave Yates followed his father and Funk into retirement.
By the late 1990s, the industry was facing increasing pressure. Overseas competition was taking over a bigger share of the market while increasingly strict environmental rules added to operating costs.
But it was fire that presented the greatest challenge to Electro-Spec. On the night of March 18, 2003, an electrical heater malfunctioned, sending the facility up in flames.
"We had 43 years of business destroyed in three hours," Smith said. Still, he decided to rebuild. "You think of all the years people put into the business up to 2003, you just couldn't walk away."
It wasn't an easy task. Electroplating equipment and raw materials are expensive. For the first time in years, Smith said, Electro-Spec had to take on debt. The total cost: $6 million.
Still, company leaders didn't have to go it alone. Franklin leaders gave the company tax breaks and helped find a new location. Dave Yates and Jim Funk even came out of retirement to help supervise construction.
"Within eight months, we had brand-new facilities," Smith said.
Despite the expense, the disaster did have a bright side: The original building was four decades old and much of its manufacturing equipment was outdated. After the fire, Electro-Spec had a new facility and automated production equipment.
The improvements have allowed the company to double revenue from $3 million in 2003 to an expected $6 million this year-without increasing its staff.
The company has plenty of loyal customers. Fred McWilliam, president of Greenwood Machine in Franklin, has been turning to Electro-Spec for 15 years.
"Their technology is superior," he said.
Steve McGeary, president of Franklinbased Precision Connector Inc., is equally impressed.
"They do whatever they can for you," he said.